BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1803
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          Date of Hearing:  April 24, 2012

                            ASSEMBLY COMMITTEE ON HEALTH
                              William W. Monning, Chair
                   AB 1803 (Mitchell) - As Amended:  April 23, 2012
           
          SUBJECT  :  Medi-Cal: emergency medical conditions.

           SUMMARY  :  Provides that emergency services and care that are 
          necessary for the treatment of an emergency medical condition 
          are a covered benefit in the fee-for-service (FFS) Medi-Cal 
          program.  Specifically,  this bill :  

          1)Adds emergency services and care necessary for the treatment 
            of an emergency medical condition and medical care directly 
            related to the emergency condition and provided on a FFS 
            basis, to the list of covered benefits in the Medi-Cal 
            program.  

          2)Defines by reference "emergency services and care," "emergency 
            medical condition," and other related definitions which 
            currently apply to a hospital's obligation to screen, treat, 
            and stabilize any patient that presents in an emergency 
            department (ED) without regard to the patient's ability to 
            pay, or insurance status. 

          3)Specifies that this bill shall not be construed to change the 
            obligation of a Medi-Cal managed care (MCMC) plan to provide 
            emergency services and care.

           EXISTING LAW  :  

          1)Establishes the Medi-Cal program, administered by the 
            Department of Health Care Services (DHCS), to provide 
            comprehensive specified health care services and long-term 
            care to pregnant women, children, and people who are aged, 
            blind, and disabled.  Services are reimbursed through FFS, 
            capitated payments to managed care plans, or other contractual 
            arrangement.

          2)Establishes a schedule of benefits under the Medi-Cal program, 
            which includes hospital inpatient and outpatient services, 
            subject to utilization controls, and establishes Medi-Cal 
            hospital reimbursement requirements.









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          3)Authorizes DHCS to contract, on a bid or nonbid basis, with 
            any qualified individual, organization, or entity to provide 
            services to, arrange for, or case manage, the care of Medi-Cal 
            beneficiaries.  Defines a MCMC plan as any entity that enters 
            into one of several types of contracts with DHCS including 
            County Organized Health Systems, Geographic Managed Care 
            plans, Local Initiatives, and commercial plans.

          4)Requires in federal law, under provisions of the federal 
            Emergency Medical Treatment and Active Labor Act (EMTALA), and 
            in state law, hospital ED to provide emergency screening and 
            stabilization services without regard to the patient's 
            insurance status or ability to pay.  EMTALA requires hospitals 
            to maintain an on-call roster of specialists in a manner that 
            best meets the needs of its patients.

          5)Requires, under state law, a hospital to render emergency care 
            and services without first questioning the patient's ability 
            to pay and defines "emergency medical condition" as a medical 
            condition manifesting itself by acute symptoms of sufficient 
            severity (including severe pain) such that the absence of 
            immediate medical attention could reasonably be expected to 
            result in any of the following:

             a)   Placing the patient's health in serious jeopardy;
             b)   Serious impairment to bodily functions; or, 
             c)   Serious dysfunction of any bodily organ or part.

          6)Requires hospitals to share proof of Medi-Cal eligibility with 
            other emergency services providers.

          7)Requires a health care service plan to reimburse providers for 
            emergency services and care provided to its enrollees, until 
            the care results in stabilization of the enrollee, except as 
            specified.  Prohibits, as long as federal or state law 
            requires that emergency services and care be provided without 
            first questioning the patient's ability to pay, a health care 
            service plan from requiring a provider to obtain authorization 
            prior to the provision of emergency services and care 
            necessary to stabilize the enrollee's emergency condition.

           FISCAL EFFECT  :  This bill has not been analyzed by a fiscal 
          committee.

           COMMENTS  :








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           1)PURPOSE OF THIS BILL  .  According to the author, this bill 
            would codify the "reasonable layperson standard" for emergency 
            medical services for persons in the Medi-Cal FFS program.  The 
            author states that this change will create a uniform policy 
            and ensure that FFS Medi-Cal patients have this important and 
            fundamental patient protection.  According to the author, 
            under California law, the reasonable layperson standard for 
            emergency medical services is in place for health plans 
            regulated by the Department of Managed Health Care including 
            MCMC plans.  However, the author argues, the standard is not 
            in place for Medi-Cal FFS enrollees and this gap in California 
            law, where no reasonable layperson standard exists, threatens 
            patient safety and needs to be closed.

          The reasonable layperson standard states that if a reasonable 
            person believes a medical condition is manifested by acute 
            symptoms of sufficient severity (including severe pain) 
            presents itself in a manner, that the absence of immediate 
            medical attention could be reasonably expected to result in 
            harm, the treatment shall be paid by the managed care plan.  
            These conditions include: a) placing the patient's health in 
            serious jeopardy; b) serious impairment to bodily functions; 
            or, c) serious dysfunction of any bodily organ or part.  The 
            author is concerned that without this protection for FFS 
            Medi-Cal patients, care rendered in the ED will be subject to 
            after-the-fact review even though it met the reasonable person 
            standard.  According to the sponsor, this has occurred in 
            Washington State, which implemented a system to review all FFS 
            claims for medical necessity.  Under the Washington system, 
            because the prudent lay person (or reasonable person in 
            California) standard only applied in managed care, but not 
            FFS, all EMTALA screening exams were still required to be 
            covered by managed care plans, but not for FFS visits if it 
            was later determined to not be medically necessary.  

          According to the author, the Washington example shows the danger 
            of not having the reasonable layperson standard in place.  The 
            state has identified approximately 500 conditions (final 
            diagnosis codes) they have determined are not emergencies and 
            will no longer cover those conditions based on the final 
            diagnosis codes. 

           2)BACKGROUND .  Medi-Cal is California's version of the federal 
            Medicaid program.  Medicaid is a 46-year-old joint federal and 








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            state program offering a variety of health and long-term 
            services to low-income women and children, the elderly, and 
            people with disabilities.  Each state has discretion to 
            structure benefits, eligibility, service delivery, and payment 
            rates under requirements established by federal law.  The 
            Medi-Cal program utilizes a variety of service delivery and 
            payment systems.  Originally the primary mechanism was FFS 
            Medi-Cal which means that a Medi-Cal enrollee obtains services 
            from an approved Medi-Cal provider who is willing to take 
            him/her as a patient for the service and accepts the Medi-Cal 
            payment rate set by the state and governed by federal law.  
            However, California has adopted the national trend to use 
            various models of managed care in place of FFS in Medi-Cal.  
            In MCMC, as in commercial managed care, the enrollee's choice 
            of providers may be limited to those in the plan's network, 
            but the plan is required to ensure timely access to care.  As 
            of August 2011, MCMC in California served about 4.4 million 
            enrollees in 30 counties, or about 60% of the total Medi-Cal 
            population.  

           3)EMERGENCY MEDICAL SERVICES  .  There is extensive law regarding 
            a hospital's obligation to provide emergency medical services 
            regardless of ability to pay.  Enrollees of a health plan, 
            including a MCMC plan have the protection of the "reasonable 
            person standard." Federal and state law set limits on the 
            reimbursement rate that a MCMC plan is allowed to pay for 
            emergency services provided to a plan enrollee by an 
            out-of-network or noncontracted hospital.  There are even 
            requirements on hospitals to share proof of Medi-Cal 
            eligibility with other emergency care and services providers 
            to prevent illegal billing of Medi-Cal enrollees and 
            prohibitions on providers billing a Medi-Cal enrollee directly 
            for covered services.  In spite of this extensive law relating 
            to the provision of emergency services in the Medi-Cal 
            program, the sponsor of this bill appears to have identified a 
            significant gap with regard to coverage of emergency medical 
            services in the FFS Medi-Cal program.  This bill seeks to cure 
            this by adding emergency medical care and services to the list 
            of covered benefits and by referencing the "reasonable person" 
            standard from other existing provisions.  

            AB 97 (Committee on Budget), Chapter 3, Statutes of 2011, the 
            Health Budget Trailer bill, implemented a mandatory copayment 
            of $50 for nonemergency use of the ED.  Pending approval from 
            the Centers for Medicare and Medicaid Services (CMS), DHCS 








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            planned to implement this copayment in both the FFS and 
            managed care settings (except for Family Planning Access Care 
            Treatment beneficiaries).  Hospitals would have been required 
            to collect the $50 copayment from the beneficiaries at the 
            time of service, and the hospital would have been reimbursed 
            the appropriate Medi-Cal reimbursement rate minus the $50 
            copayment.  In June 2011, DHCS submitted a request to CMS to 
            amend the State's Bridge to Reform Waiver to allow DHCS to 
            impose mandatory copayments.  On February 6, 2012, DHCS 
            received notice from CMS that this request was not approved as 
            it was not consistent with federal Medicaid requirements.  

            DHCS stated that it disagrees with the CMS decision and is 
            examining its options moving forward, including administrative 
            appeal options.  DHCS assumed an October 1, 2012 start date 
            for the imposition of copayments in the State Budget.  
            Therefore, according to DHCS there is some additional time to 
            resolve this matter before the State experiences any savings 
            erosion. 
             
           4)SUPPORT  .  The sponsor, the California Chapter of the American 
            College of Emergency Physician (California ACEP) supports this 
            bill because it is important legislation standardizing the 
            reasonable layperson standard so that all Medi-Cal patients 
            are covered when they seek treatment for an emergency.  
            According to this support, the law currently requires that if 
            a reasonable layperson believes they are having an emergency 
            and they go to the ED, the MCMC plan must pay for the care 
            provided regardless of whether the patient's condition turns 
            out to be less serious than the patient originally feared.  
            California ACEP states that while the reasonable layperson 
            standard had been a long established patient protection in 
            California, efforts to erode this protection are surfacing in 
            other states.  The sponsor concludes that given that threat, 
            it is time to close the loophole in California law to protect 
            all Medi-Cal patients. 

           5)PREVIOUS LEGISLATION  .  

             a)   AB 1142 (Price), Chapter 511, Statutes of 2009, requires 
               a hospital that obtains proof of a patient's Medi-Cal 
               eligibility subsequent to the date of service, to provide 
               all information regarding that person's Medi-Cal 
               eligibility to all hospital-based providers, ambulance 
               service providers, and other hospital-based providers that 








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               bill separately for their professional services.  Permits 
               DHCS to assess a penalty, up to three times the amount 
               payable by Medi-Cal, against a provider who, despite having 
               proof of Medi-Cal eligibility seeks payment from or fails 
               to cease collection efforts against the beneficiary.

             b)   AB 1203 (Salas), Chapter 603, Statutes of 2008, 
               establishes uniform requirements governing communications 
               between health plans and non-contracting hospitals related 
               to post-stabilization care following an emergency. 
               Prohibits a non-contracting hospital from billing a patient 
               who is a health plan enrollee for post-stabilization 
               services, except as specified. 

           REGISTERED SUPPORT / OPPOSITION  :  

           Support 
           
          California Chapter of the American College of Emergency 
          Physician (sponsor)
          California Black Health Network

           Opposition 
           
          None on file.
           
          Analysis Prepared by  :    Marjorie Swartz / HEALTH / (916) 
          319-2097